Ratio Petroleum Jumps 16%: It Releases an Updated Resource Report to the Patch BlockThe partnership published an updated resource assessment report for the Block in Guyana • According to the NSAI report, 9 prospects with potential for more than 2 billion barrels have been identified so far • Ratio Petroleum holds 25%Participation Unit of the Ratio Petrolium Partnershi(340 -2.21%)Jumped 14% today on a high turnover. After the partnership published an updated resource assessment report for the Kaieteur Block in Guyana, South America. The publication of the report, prepared by NSAI, follows the Exxon decision, the block operator, to carry out exploratory drilling in the block.According to the NSAI report, nine exploration prospectuses with a potential of more than 2 billion barrels of oil have been identified in the block (the maritime area where the exploration is being conducted). The data included in the report relate only to a partial interpretation to date of the seismic survey covering 40% of the block area.It is estimated that the block has a high potential for discovery of oil wells, and therefore the partnership decided to preserve its share in the block (25%) and not to exercise the right to sell 10% of the rights.The partnership estimates that the first drilling is expected towards the end of the first half of 2020 at the Tangier Prospector (located within the block), which has a potential of about 256 million barrels with a relatively high geological probability of 72% for oil.
Energy giant Exxon, the partner of Ratio Petroleum and the operator in the Keichor block, has so far found over 5.5 billion barrels of oil in 13 discoveries, raising the likelihood of finding oil in the Quechore block.Ratio Petroleum holds 25% of the rights in Block. Exxon, the block operator holds 35%, Hess 15% and the local partner 25% of the block rights.Exxon discovered the LIZA reservoir in Guyana in 2015 and has been developing it ever since. Exxon is expected to start producing oil from the LISA field by 2020, and by 2025 production from the field can reach about 750,000 barrels of oil per day.The American giant has undertaken to carry out exploratory exploration in the field in which Ratio, which covers an area of 5,700 square kilometers (an area equivalent to more than 14 marine licenses in Israel), will invest for exploration. In exchange, if an oil or gas deposit is discovered, Exxon will open it.Ethan Eisenberg, a geologist at Ratsio Petroleum, notes that “in my professional life I have seen hundreds of prospectuses for drilling and Prospect Tangier is the prospect with the highest chances of success I was involved in.Ratio Petroleum, which raised NIS 105 million on the Tel Aviv Stock Exchange in January 2017, is the sister company of the Ratzio gas exploration partnership (which holds 15% of the Leviathan gas reserve). The partnership is engaged in oil and gas exploration outside the State of Israel, in development and production, mainly in marine assets. Since its IPO, its participation unit has jumped nearly 400% (including today’s rise) and the partnership’s value reached NIS 565 million. Apart from Guyana, Ratio Petroleum also has operations in Suriname (20% in franchise) in Ireland and the Philippines.
The controlling shareholder of Ratio Petroleum (the general partner) is the controlling shareholder in Ratio – the Landau family (50% of the general partner) and the Rotlevi family (50%). The partnership’s CEO is Itay Raphael and the geologist Eisenberg serves as a senior consultant.Sanctions on Tehran: The currency is at a low, inflation is rising, and those who are the main victimsA rise in the price of oil, double-digit inflation and a 7-month low in the value of the Iranian real, these are just some of the factors that return Iran back to the days before the signing of the nuclear agreement. • A year after Trump announced the US withdrawal from the nuclear agreement, The Iranian economy is increasingly concerned about an escalation in the security situationThe move of the American destroyer in the Persian Gulf last weekend, as part of the escalation due to the intensification of sanctions on Iran, constitutes a dramatic escalation that violates the geopolitical balance in the region. About a week ago, the US sanctions on Iran went into effect when the US announced the cancellation of the exemptions it granted last November to a number of countries regarding the import of oil from the country.A year after Trump announced that the United States would withdraw from the nuclear deal, Iran continues to feel the pressure when the US sanctions are making the economy difficult, and their influence is likely to increase as the US exempts the eight countries that continued to trade with Tehran. In response to the intensification of the sanctions, Iran did not withdraw from the nuclear agreement, but withdrew partially when it announced that it would stop implementing some of the commitments it had undertaken in two months, such as the export of enriched uranium and heavy water.On the other hand, due to intelligence warnings that Iran intends to attack Saudi oil facilities, the US has sent an aircraft carrier to the Middle East Which included Patriot missiles for the defense, and if the message was not clear, then the US added two B-52 bombers to the security package, but Tehran continues to threaten the escalation.Oil has risen more than 30% since the beginning of the yearThe US decision to toughen the sanctions on Iran and to cancel the exemption that allowed a number of countries to purchase oil from it, along with the increased risks of uncertainty in Venezuela and Libya, led the price of oil to a rise of more than 30 percent from the beginning of the year to a six-month high. But it is hard to say that anyone can provide an accurate opinion on this issue, as it would have been hard to believe that its price would fall to $ 35 in January 2016, especially at times like those in which the market is very sensitive to headlines about the trade war .
When examining the effect on the global arena, given the share of oil as an essential component in the calculation of inflation, its rise in price as a result of limiting the supply of world oil may contribute to its rise. However, it is quite possible that the rise in oil price in view of the sanctions already embodied in the market. In this context, it should be noted that the Fed left the interest rate unchanged in the latest announcement, claiming that the inflation threats were “temporary”. The rise in inflation may affect the monetary policy of the central banks. To this must be added the cost of fuel that is expensive and may weigh on companies in the worldInflation galloping, rage in the streetsReducing Iranian oil exports weighs heavily on the cash flow to the Islamic Republic. Since the cancellation of the exemptions on trade with Iranian Tehran, Iran has already fallen to a seven-month low. The collapse in the value of the real against the currencies of its trading partners accelerates import prices, leading to higher prices and an increase in inflation to a double digit rate.In addition, blocking the access of the Iranian financial system to dollar transactions deepens Iran’s foreign currency crisis and will cause inflation to accelerate. The central bank in the Republic may continue to rapidly update the exchange rate and further tighten restrictions on capital flows. The continuing trend of erosion in the value of the real is leading to an increase in import prices, and as a result inflation rises – one of the structural problems facing Iran’s economy, which, apart from two exceptional years, recorded double-digit inflation in all years between the revolution of 1979 and 2015.
The purpose of the sanctions is to bring Iran weaker to the negotiating table and to withdraw from the nuclear agreement. The need to deal with the sanctions will force the Iranian government to deviate from necessary reforms and impose a tight fiscal and monetary policy. The expected decline in the flow of foreign investment will make it difficult to create new jobs. In addition, measures to damage the country’s banking system and the disruption of oil exports could bring about a rapid increase in unemployment, a sharp decline in government revenues, and additional inflationary pressures. In fact, the stepped-up US steps back Iran’s economy on the eve of the signing of the nuclear agreement, and the previous sanctions imposed on Iran led to the signing of an agreement in July 2015. Meanwhile, the Americans have left Iran an open channel of communication through Switzerland, “CNN”, Trump asked the Swiss for the last 24 hours to transfer his personal number to Iran.Last year, Iran’s GDP stood at around $ 440 billion, indicating that the economy has not recovered from previous sanctions. The Iranian government will now have to continue to adopt a restrictive policy in order to curb inflation and maintain a budgetary framework. Recall that the Iranian public has developed over the years to adapt to the economic crisis, but the introduction of unpopular measures for one more time is expected to intensify protests throughout the republic. Want to invest in the field with the most likely (risk) risk ratio?No environment, no technology, no development. The reason for the attractiveness of the gas and oil sector is that it is simply cheap compared to the alternatives. The dividend yields are tempting, while a long-term examination of the yields of the global oil and gas companies shows that the sector is lagging behind by hundreds of other sectors
When I started writing this column about half a year ago, the goal was to find the different parameters in different industries that should be given “overweight” before deciding whether to invest or not. Some of these parameters can not always be seen in the companies’ reports but rather in a broader and more advanced macro perspective, which includes an understanding of the industry’s development, the environment and the opportunity.But this is not the reason to write about the gas sector and oil – no environment, neither technology nor development. The reason is that it is simply cheap in relation to the alternatives. The dividend yields are tempting, while a long-term review of global oil and gas companies’ returns shows that the sector is lagging behind the other sectors.The past decade has been one of the weakest in the world’s oil and gas industry, with oil and gas price volatility smashing quite a few companies in the field, investors and even economies and regimes. While the S & P 500 managed to produce a 245% return in 10 years and sectors such as information technology and consumer goods nearly doubled, the energy sector gave a lame return of several tens of percent. And if we go down to deeper resolutions, then companies that supply energy equipment and services have closed the decade with zero return.The price of oil soared, but the sector remained behindFrom the end of 2018, or, to be precise, on December 24, 2018, the stock market rallied from the October crash, with the S & P 500 rising 25%. But again, the energy sector is unable to catch up and lag behind with an increase of about 20%. Even less, if we take into account the rise in oil prices, which recorded a phenomenal recovery of more than 50% from that point in time. The last time the price of a barrel of oil was trading at $ 70 a barrel, the value of the general energy sector, S & P Energy was 7% higher, and the smaller oil and gas index, S & P 600 Energy was 30% higher.
The obvious conclusion is that investors are simply skeptical about the stability or pricing of oil prices – and the truth is quite right. After the black gold crashed again to $ 40 per barrel, the output of the OPEC cartel and its allies (Russia), along with US sanctions against Iran and Venezuela, Which led to a total collapse of Venezuela) have managed to raise prices again, investors at this stage fear that monopolistic and geopolitical regulation will not last for long, and fears of slowing global growth and undermining demand have a negative impact. To see that the price of oil is now finding it difficult to return to levels of $ 75-80 per barrel in which it is traded in 2018, Which estimates global growth would continue and even accelerate.The “guiding hand” is in our favorOil prices, certainly for shorter ranges, are very difficult to predict, certainly when they are not at extreme prices (low to loss, or significantly higher than the economy). Today’s pricing levels are reasonable, but the intentional hand wants more. The US president is working hard to curb Iran’s oil exports altogether, which is expected to lead to a further rise in world oil prices, albeit for a shorter period, while OPEC would prefer to see a higher oil price of $ 10-20, Saudi Aramco’s state oil company, which has already been postponed several times.Rising oil prices is always a good reason to buy energy stocks, but is too speculative. At this stage I was prepared to risk saying that the “guiding hand” at least would work to maintain the price of oil in this environment, so that the investment risk is limited. In addition, the best way to dispel investor skepticism about the price stability of a barrel of oil is time. As time passes and the price remains at least steady, the fear of its collapse will diminish, which will increase investors’ desire for energy stocks.When everything is expensive and just looking for cheaperThe stock market broke records last week and the next step after a record is the economic debate on the cost of investment. Investors will seek to take advantage of the positive momentum in the market through cheaper investments, or in simpler language, “What has not yet risen enough and who is next.” The energy sector is trading at more modest multiples, certainly compared to consumer companies, information and more, and therefore, with high probability, it will be in the sights of investors.
Exploration and drilling companies, such as Exxon Mobile with a dividend yield of 5%, or ConocoPhillips, which trades at a P / E ratio of 10, could be a good investment alternative for investors. Others will look for opportunities at the lower endpoints of equipment and service companies in the field, which have struggled to recover since the collapse in oil prices. The generous dividend yield of 4.5% -6.5% may also appeal to investors, with the alternative being a yield of 2.5% offered in the US government bond market Ahh, and there is also technological promise – since 2016, the oil drilling and oil giants are investing billions in artificial intelligence, autonomy and big data. The advantages of these technologies in processing information and drawing conclusions are often brought in this column. Although in the field of gas and oil, the use of these advanced technologies is still in diapers, the advantages of which are natural and highly intuitive, in exploratory drilling, in which millions of different data and parameters are analyzed and compared simultaneously in underwater surveys, for example by autonomous submarines, Active and mainly in the analysis and forecasts regarding demand for equipment, inventory and more. The use of these technologies, which should be significantly boosted from 2020 to 2023, is expected to improve the profitability of the companies, beyond the improvement that has led to the technological technological improvements and manpower cuts that this industry has led in recent years.The Silent Revolution: A fundamental change in the structure of credit to the business sector in IsraelThe bottom line is that when investors look for what remains to be bought in the non-stop market, they will meet the oil and gas sector, which is far from its peak. They will rely on US President Donald Trump, Saudi Prince Muhammad bin Salman and Russian President Vladimir Putin to maintain high oil prices. In that the lower correlation between the sector and the stock and bond market may be a form of protection in the investment portfolio. The new oil cartel company OPEC: Russia
Thus, Russia gradually turned from a country that had not cooperated with OPEC to an unprecedented partner of the organization. To the extent that President Putin, who had significant influence on the oil markets, became the unofficial spokesman of the organization when he contradicted President Trump’s decision to reach an agreement on oil prices with the SaudisWe have agreements with OPEC, we are complying with the agreements and we have no news, or information, from our Saudi partners or from any other OPEC member, on the willingness to leave these agreements. “Russian President Vladimir Putin responded to President Donald Trump This week, according to which he obtained Saudi consent to increase oil production(56.16) In order to lower prices. “It is unlikely that Saudi Arabia will abandon the agreement that was reached in December and is supposed to take place by the end of June, because it was the one who initiated it,” added Putin.When representatives of the Organization of Petroleum Exporting Countries met in Vienna in December, the organization was in danger of disintegration. Oil prices have plummeted, and countries such as Iran, Venezuela and Libya have refused to cut output. Qatar withdrew. President Trump pressed Saudi Arabia to maintain its low price level.With discussions on the brink of collapse, the rescue came from an unexpected place – Russia, which is not even OPEC, and President Putin agreed to reduce Russian oil production with OPEC, when Iran could continue to produce as it pleased.When the OPEC cartel falters from crisis to crisis – with price falls, regime changes in member states, internal conflicts in the organization and constant attacks by President Trump – Russia has used its power as a major oil producer to help, gradually turning from a country that has not cooperated with OPEC in any way To a country that is an unprecedented partner of the organization, and thus President Putin has a significant impact on the direction of the global oil market, which generates 1.7 trillion dollars a year, and more influence in the Middle East.”Russia is the new therapist for OPEC,” says Helima Croft, chief commodity strategist at RBC Capital Markets in Canada.
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